Correlation Between NAU IB and Hwangkum Steel
Can any of the company-specific risk be diversified away by investing in both NAU IB and Hwangkum Steel at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining NAU IB and Hwangkum Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NAU IB Capital and Hwangkum Steel Technology, you can compare the effects of market volatilities on NAU IB and Hwangkum Steel and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in NAU IB with a short position of Hwangkum Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAU IB and Hwangkum Steel.
Diversification Opportunities for NAU IB and Hwangkum Steel
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NAU and Hwangkum is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding NAU IB Capital and Hwangkum Steel Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwangkum Steel Technology and NAU IB is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on NAU IB Capital are associated (or correlated) with Hwangkum Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwangkum Steel Technology has no effect on the direction of NAU IB i.e., NAU IB and Hwangkum Steel go up and down completely randomly.
Pair Corralation between NAU IB and Hwangkum Steel
Assuming the 90 days trading horizon NAU IB Capital is expected to under-perform the Hwangkum Steel. In addition to that, NAU IB is 5.33 times more volatile than Hwangkum Steel Technology. It trades about -0.37 of its total potential returns per unit of risk. Hwangkum Steel Technology is currently generating about 0.14 per unit of volatility. If you would invest 488,500 in Hwangkum Steel Technology on November 3, 2024 and sell it today you would earn a total of 6,000 from holding Hwangkum Steel Technology or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NAU IB Capital vs. Hwangkum Steel Technology
Performance |
| Timeline |
| NAU IB Capital |
| Hwangkum Steel Technology |
NAU IB and Hwangkum Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAU IB and Hwangkum Steel
The main advantage of trading using opposite NAU IB and Hwangkum Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAU IB position performs unexpectedly, Hwangkum Steel can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hwangkum Steel will offset losses from the drop in Hwangkum Steel's long position.| NAU IB vs. Pureun Mutual Savings | NAU IB vs. Jb Financial | NAU IB vs. Jeong Moon Information | NAU IB vs. Korea Information Engineering |
| Hwangkum Steel vs. Bookook Steel | Hwangkum Steel vs. Wonil Special Steel | Hwangkum Steel vs. Insung Information Co | Hwangkum Steel vs. Dong A Steel Technology |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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